Expect more $20K broker fees if NYC doesn’t fix its housing-market mess

[Kamaji]

Expect more $20K broker fees if NYC doesn’t fix its housing-market mess

By Howard Husock
August 21, 2022

The Post’s report that a Manhattan real-estate broker charged a $20,000 fee to get a prospective tenant a rent-regulated apartment on the Upper West Side will probably prompt calls for new consumer-protection laws and cries for that agent’s license. Far better for New Yorkers to thank broker Ari Wilford — for helping to make clear how rent regulation distorts our housing market and invites profiteering.

Manhattan’s median rent has hit an all-time high of $4,150 a month — but Wilford offered a sweet regulated one-bedroom apartment for just $1,725. There’s a lesson here, but it’s not the one housing-regulation advocates are likely to draw.

Just as water flows downhill, markets will assert themselves. When the list price of a good is so far below its actual value to the consumer, shadow markets develop. That’s what we have in New York’s rent-regulated pseudo-market. It’s a phenomenon familiar to citizens of dysfunctional countries like Argentina, where governments try to control their currencies’ value to make imports cheaper and control inflation — but black markets in US dollars develop instead.

Price controls make it impossible for supply and demand to balance — and the results include $20,000 broker fees.

That sky-high fee would, in a saner world, be a message to Albany: Rent regulation has never been a good idea and never will be. Those who look closely and clearly at the Manhattan housing market know that rent stabilization offers such a good deal for the lucky winners in its game of apartment musical chairs that they stay more than twice as long in their units as those in nonregulated ones. That means there are plenty of under-occupied units on the very same Upper West Side where brokers dine out on desperate tenants.

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Source:  https://nypost.com/2022/08/21/expect-more-20k-broker-fees-if-nyc-doesnt-fix-its-housing-market-mess/

[DefiantMassRINO]

Nothing new there.  Harvard University professors and Massachusetts state court judges were known to live in rent-controlled appartments during the 1970s and early 1980s.

Rent control leads to two extremes - connected, high status people renting appartments in the most desirable locations at below market rates; and properties that are not maintained (slums, projects).

Rent control does nothing to bring rental supply and demand back into balance.  It's window dressing so limousine liberals can duplicitously claim they are solving the problem without really solving the problem by placing restrictions on other people's properties.

[Kamaji]

Nothing new there.  Harvard University professors and Massachusetts state court judges were known to live in rent-controlled appartments during the 1970s and early 1980s.

Rent control leads to two extremes - connected, high status people renting appartments in the most desirable locations at below market rates; and properties that are not maintained (slums, projects).

Rent control does nothing to bring rental supply and demand back into balance.  It's window dressing so limousine liberals can duplicitously claim they are solving the problem without really solving the problem by placing restrictions on other people's properties.

Exactly.